Legal Adviser: Do Your Materials Meet Code?

A client, Ed, is starting a company that will use recycled
plastic to manufacture building products, which we'll hereafter
refer to as "stuff." A builder looking at Ed's display in a
product show asked if his stuff meets code.

Ed called me and asked, "Well, does it?" "Hey, you're the
engineer," I said. However, I went on to explain what "meeting
code" requires and why the builder was concerned.

The builder is on the front line on code issues. He's the one
who deals with the code enforcement officer. He also, whether
he realizes it or not, gives his customer an implied warranty
that the building materials he chooses are "fit for their
purpose," which means that those materials meet the
requirements of the building code.

Fitness of Purpose

Meeting code is part of the fitness-of-purpose warranty
because "fitness" means that you can use the end product -- the
building -- as intended. If the customer can't get an occupancy
permit, he can't use the building: It isn't fit for its
intended purpose. (In some states this warranty is called an
implied warranty of merchantability.)

Does that mean that because Ed's stuff is not specifically
mentioned in the building code, a builder who uses it can't get
an occupancy permit?

No. Modern building codes don't usually talk about types of
materials so much as they talk about building functions. For
example, instead of "Your stairs must be constructed from
wood," the codes say things like "Your stairs must be
constructed from fire-resistant material" or "must be able to
carry a load of x pounds."

Code officers who have doubts about the materials used have
the right to ask for evidence that they meet the code
standards. That evidence could consist of things like
engineering reports or fire certification tests. A well-advised
builder would ask the manufacturer if that sort of information
is available before he uses a new material.

Suppose a builder installs the stuff and it doesn't meet code.
In that case, the builder's customer could recover the costs of
replacement and lots of other damages from the builder. It's
not especially relevant how the builder's warranties or
disclaimers were written. A building that can't be used isn't
worth anything to the builder's customer. It would be an
exceptional disclaimer that could evade that problem.

If the builder has to reimburse his customer in some way,
could he recover those costs from Ed? Yes, he could. The
manufacturer also gives the builder an implied warranty of
fitness-of-purpose. If the customer can recover his damages
from the builder, the builder can usually recover those costs
from the manufacturer.

After the Occupancy Permit

So far, we've just talked about meeting code requirements.
What about after the occupancy permit has been obtained? Even
though, as we've said, you give your customers an implied
warranty of fitness-of-purpose on the materials you use, most
contractors don't want to be in the business of guaranteeing
their materials indefinitely. By giving your customers an
actual warranty of your own (preferably written with the advice
of an attorney), you can include a disclaimer that limits the
customer's recourse to the manufacturers' warranties after the
occupancy permit has been issued and the job has been
accepted.

The language of the disclaimer could go like this: "After
acceptance of the builder's work, the customer is limited to
the manufacturers' warranties. The builder warrants that he
will preserve all such warranties." So if the plastic wood
product bubbles in the summer sun, the customer should get in
touch with the manufacturer instead of chasing down the
builder.

In order to make this kind of disclaimer work, however, the
builder must do everything necessary to preserve the
manufacturers' warranties. He can't make his customer go to the
manufacturer if he has lost or voided those warranties.

Preserving the Warranties

To preserve the manufacturers' warranties, you must install
their stuff the way they say to install it. If you know a
better way, don't use it. You could jeopardize the warranties.
Also, you must use the stuff for the purpose intended. If it's
supposed to be interior decking only, don't use it for a patio
out in the sun. Finally, if there's paperwork involved -- if
you have to mail in forms with the customer's name and so forth
-- you must do that. Otherwise, when the stuff curls or melts
or comes apart, it's your problem.

Quenda Behler Story has practiced and taught law for
over 25 years and is the author of The Contractor's
Plain-English Legal Guide
(http://www.craftsman-books.com).